Vinodh,
When you changed the SQL-Service to run with Local User account (with admin
rights), did you make this change in the SQL Server 2000 Enterprise Manager
(EM)? Specifically, under the server's property security tab? If not, then
you must re-do the change via the EM and be sure that the Local User account
is a member of the server's Admin Group. If possibly, use either the system
account (LocalSystem) or a DOMAIN\Account where the login DOMAIN\Account is
a member of the server's Admin. Group. Two good KB articles to review for
these types of issues are:

277549 (Q277549) PRB: Unable to Build Full-Text Catalog After You Modify
MSSQLServer Logon Account Through [NT4.0) Control Panel [or Win2K Component
Services] at http://support.microsoft.com/default.aspx?scid=KB;EN-US;277549

317746 (Q317746) "PRB: SQL Server Full-Text Search Does Not Populate
Catalogs" at http://support.microsoft.com/default.aspx?scid=kb;en-us;317746

Additionally, a common cause of the error "The Microsoft Search service
cannot be administered under the present user account" is a missing
(removed) or modified SQL Server 2000 BUILTIN\Administrators login. Is this
Login present on your server? If so, it must be configured with the default
of master database, English and most importantly have the server role of
System Admin (sysadmin) check marked. If for security reasons, you or your
network administrator has removed this login, then you can use the following
SQL code to add back the functionality that the MSSearch service requires in
order to function correctly:

exec sp_grantlogin N'NT Authority\System'
exec sp_defaultdb N'NT Authority\System', N'master'
exec sp_defaultlanguage N'NT Authority\System','us_english'
exec sp_addsrvrolemember N'NT Authority\System', sysadmin

When you say that you have "tried it re-installing a few times" are you
referring to re-installing SQL Server or just the Full-text Search and
MSSearch components?

Hope this helps!
Regards,
John